Kenya's Ministry of Agriculture is requesting an extension on duty-free sugar imports due to a local shortage that could lead to a price surge if the current window expires.
Agriculture Cabinet Secretary Mithika Linturi, in a letter to the Treasury counterpart, says there is a need to extend the existing waiver, which permits duty-free sugar imports from outside the Common Market for Eastern and Southern Africa (Comesa).
The waiver is set to end on April 6 and Mr Linturi proposed a two-month extension to fulfill the country's sugar requirements.
"The purpose of this memo is therefore to brief you on the current status in the country and recommend your approval to extend the Gazette Notice 14093 dated October 13, 2023, and Gazette Notice No 10358 dated 2024 to June 30, 2024."
Kenya has been struggling with local production and last year stopped millers from processing sugar for three months to allow the cane that was on the farms to mature, pushing the cost of a 2-kilo packet to Ksh450. The prices have so far dropped to a low of Ksh390.
According to Mr Linturi, the annual demand for table sugar is 1 million tonnes, averaging 84,000 tonnes per month domestically.
With current local production trends, a projected domestic sugar deficit of 192,000 tonnes is anticipated for the first six months of 2024.
To cover the shortfall, Kenya aims to secure a total of 720,000 tonnes of table sugar between January and August 2024, to be met through local production and imports.
Given the ongoing global sugar shortage, Mr Linturi highlighted the importance of granting importers more time to meet demand.
Previously, 100,000 tonnes of duty-free sugar from outside COMESA were allocated to importers in January 2023 through Gazette Notice No. 15801 dated December 22, 2022.
An additional 180,000 tonnes were issued to importers via Gazette Notice No. 7022 dated May 25, 2023, while another 290,000 tonnes was approved for importation through Gazette Notice No. 10358 dated August 9, 2023, published on August 11, 2023.
Additionally, 250,000 tonnes were allocated through Gazette Notice No. 14093 dated October 13, 2023.
Kenya is allowed to import at least 350,000 tonnes of sugar under the Comesa safeguards to meet the loal demand. Sugar coming outside of the regional bloc normally attracts a 50 percent duty under the East African Community Customs.
